The SEC proposed amendments to certain rules that govern money market funds in order to make money market funds more resilient to short-term market risks and to provide greater protection for money market fund investors.

The SEC release notes the growth of money market funds and as a result of their growth, the increased significance of money market funds in the capital markets.

Until recently, money market funds have been very stable. The SEC attributes the stability to three principal factors. First, the short-term debt markets were generally relatively stable. Second, many fund advisers correctly analyzed the risks of portfolio securities. Third, fund managers and their affiliated persons have had significant sources of private capital that they were wiling to make available to support the stable net asset value of a money market fund when it experienced losses in one or more of its portfolio securities.

Please see full Summary for more information.